We got you to the sixth and seventh checkpoints, Appraisal received & Resubmitted for final approval, in our previous post.
Now we tackle the eighth checkpoint on your way to home ownership: Closing disclosure out.
We are quickly approaching closing on your home loan. The final hurdle is usually the signing of the closing disclosure (CD). This is the document that details all the important terms of your loan:
- Loan amount
- Interest rate
- Monthly payment
- Closing costs
- Cash to close
We will call you when we order the CD to let you know to be on the lookout for it. It will come directly from the lender, not from us. It is mission critical that you acknowledge the e-mail and sign the CD ASAP as it starts the three-day clock for us to be able to close your loan. This doesn’t mean that you will be closing in three days. It means that the soonest we can close is after the third day.
For example, if your CD goes out and is signed on Monday, then the soonest we can close would be Thursday. Loans generally fund and record the following business day, which would put you moving in to your new home on Friday. If you wait until Tuesday to sign the CD, then the soonest we can close will be Friday, and you won’t be moving in to your new home until the following Monday.
We always do our best to get the CD ordered and out to you as soon as we possibly can. We are not able to order the CD until the appraisal is in and cleared by the underwriter. So it often is right at the very end of the process.
The CD sent by the lender may also have some errors on it. It is common for the seller-paid costs to be allocated incorrectly, which will show you needing more cash to close than you actually do.
The CD is sent to the escrow officer at the same time that it is sent to you. The escrow officer will work directly with the lender to get the CD balanced and correct before you go to the closing table.
The alternative option is for the lender to send the CD to the escrow company to be balanced prior to sending it to you. This adds several days to the process. We would rather get you a CD that is mostly correct so we can start the three-day clock and work to get it balanced while the clock is ticking, rather than get it corrected before starting the timer.
Next, we tackle Checkpoints 9 & 10 – Clear to close & Closed.